Tuesday, July 31, 2018

Economic inequality - In America the Beautiful, la noblesse n'oblige pas

America, America
May God thy gold refine
Till all success be nobleness
And every gain divine

Noblesse oblige (/noʊˌblɛs əˈbliːʒ/; French: [nɔblɛs ɔbliʒ]) is a French expression used in English. It translates as “nobility obliges” and denotes the concept that nobility extends beyond mere entitlements and requires the person who holds such a status to fulfill social responsibilities. For example, a primary obligation of a nobleman could include generosity towards those around him. - Wikipedia.

Not so much in today’s America. Some gains are more divine than others - by a lot. Following are excerpts from the Popular.info email, “5 economic statistics every voter should know.”

The GDP numbers show the economy overall is growing. But the real wages of the average American is going down. Real wages are 9.3 percent lower today than they were in 2006. … real wages have dropped sharply since Trump passed his massive tax cuts at the end of last year. The Trump administration promised that the average family would see their income go up by $4,000. Instead real wages decreased by about 1.4%.

One reason why real wages can go down while the economy expands is that workers are getting a shrinking percentage of corporate income. Workers’ share of corporate income in 1958 was 80.9%. It remained over 80% for much of the 1980s and 1990s. Today, workers receive just 75.7% of corporate income. … despite the flashy headlines about individual companies handing out modest bonuses or other benefits after the Trump tax cuts, corporations overall are using the money to reward shareholders, not workers.

A huge chunk of the windfall corporations received from the Trump tax cuts has been spent by corporations to buy back their own stock. [That was predicted at the time!] Corporate executives get most of their income through stock options and other stock-based instruments. … massive buybacks leave little money to either increase wages or invest in capabilities that could increase productivity (which ultimately result in wages increases). In the first quarter of 2018, corporations spent $242.1 billion corporate stock buybacks, an all-time record. That record was smashed in the second quarter, when corporations spent $437 billion on buybacks.

The average CEO for an S&P 500 company made $13,940,000 last year. That’s 361 times higher than the average worker, who made $38,613. … [For example:] The CEO of Mattel, Margaret H. Georgiadis, made $31,275,289 last year — 4987 times more than Mattel’s average worker. In the 1950s, the average CEO made 20 times the average worker. Since the 1950s, while wages for workers have stagnated, CEO pay has increased by 1000%.

While CEOs rake in millions, 11.4% of Americans still make poverty-level wages. That means that “even with full-time, year-round employment, their earnings would still fall below federal poverty guideline for their family size.” … one in nine American workers are not paid a wage that allows them to escape poverty. For a family of 4, the poverty level in 2018 is $25,100.

Imagine a Trumpian response to all this. “We’re going to have the most beautiful divide, the largest divide the world has ever seen. We nobles are obliged - to ourselves.”

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